On Wednesday, April 26, the Supreme Court will hear oral arguments in the Sandoz  Inc. v. Amgen Inc. case.  This case involves the interpretation of the Biologics Price Competition and Innovation Act ("BPCIA"), which will be the Court's first opportunity to consider this statute enacted in 2010 to facilitate the entry of biosimilar drug products into the marketplace.  However, even though the purpose of the statute is commonly understood, the language of the BPCIA is far from clear, so much so that Judge Lourie described it as "a riddle wrapped in a mystery inside of an enigma."  As a case in point, the Amgen v. Sandoz decision authored by Judge Lourie contained two dissenting opinions (at least in part).  Patent Docs began following this case from the very beginning; at the time the FDA accepted its first aBLA from Sandoz to market a biosimilar version of NEUPOGEN^® (see "Finally, A Biosimilar Application Has Been Accepted By The FDA").  Now, almost three years later, the Supreme Court will be considering two issues that have plagued this case from Judge Seeborg's early rulings in the Northern District of California to the Federal Circuit's highly fractured conclusions:  (1) whether the biosimilar applicant is required to provide the reference product sponsor ("RPS") with its abbreviated biologics license application ("aBLA") and related manufacturing information in order to take advantage of the abbreviated approval process, and (2) whether the 180-day notice of commercial marketing can be given before FDA approval.  In this preview post, we will review the first of these issues.

This case stems from two appeals from the aforementioned Federal Circuit opinion:  Sandoz v. Amgen (No. 15-1039) and Amgen v. Sandoz (No. 15-1195), which were subsequently consolidated.  Amgen did not initially appeal the decision related to aBLA-disclosure provision, but instead filed a conditional cross-petition asking the Court to review that issue in the event it granted the Sandoz petition for writ of certiorari on the notice-of-commercial marketing issue.  Specifically, the question posed by Amgen was:

Is an Applicant required by 42 U.S.C. § 262(l)(2)(A) to provide the Sponsor with a copy of its biologics license application and related manufacturing information, which the statute says the Applicant "shall provide," and, where an Applicant fails to provide that required information, is the Sponsor's sole recourse to commence a declaratory-judgment action under 42 U.S.C. § 262(l)(9)(C) and/or a patent-infringement action under 35 U.S.C. § 271(e)(2)(C)(ii)?

Not surprisingly, this case has garnered a significant amount of amicus interest from pharmaceutical companies that market biologic therapeutics, biosimilar manufacturers, trade organizations, and academics.  The Solicitor General's office filed a brief for the United States in support of Sandoz.  In addition, eight other amici filed briefs in support of the petitioner, although many did not address Amgen's question (and those that did gave it little attention).  On the other hand, there were five amicus briefs filed in support of Amgen, including three submitted by pharmaceutical companies: Abbvie Inc, Genentech, Inc, and Janssen Biotech Inc. (all of which are reference product sponsors dealing with aBLAs filed against their products); one submitted by the Biotechnology Innovation Organization (BIO); and one submitted by eleven Professors.  For the record, the brief of the eleven Professors was filed by Patent Docs author Kevin E. Noonan, Ph.D. as counsel of record, along with other attorneys at McDonnell Boehnen Hulbert & Berghoff LLP.

To understand the question presented by Amgen, it is important to understand the so-celled "patent dance."  The patent resolution section of the BPCIA consists of a series of exchanges between the biosimilar applicant and the RPS that most likely culminates in litigation that potentially proceeds in two phases.  This procedure begins with the FDA's acceptance of the aBLA, after which the biosimilar applicant is to provide the application and other information describing the process(es) used to manufacture the biosimilar product.  The patent dance consists of a cascade of information exchanges regarding the patents that the parties believe could reasonably be asserted against the biosimilar drug product were it to be marketed before patent expiration.  The parties negotiate a first set of identified patents that will be asserted in a first round of litigation.  The remaining identified patents (if any) are held in reserve until the biosimilar applicant provides notice that it intends to market the biosimilar product, at which time the RPS can seek a preliminary injunction with respect to the second-phase patents.  If the biosimilar applicant fails to complete any action required by the BPCIA, the RPS is permitted by the BPCIA to immediately bring a declaratory judgement action.

The information disclosure provision of the BPCIA can be found at § 262(l)(2)(A), and reads:  "[the aBLA applicant] shall provide to the reference product sponsor a copy of the application submitted to the Secretary under subsection (k), and such other information that describes the process or processes used to manufacture the biological product that is the subject of such application . . . ."  The Federal Circuit held that even though the statute uses the word "shall," in the context of the BPCIA, "shall" does not mean "must."  Importantly, the statute contains an optional remedy:  if a biosimilar "applicant fails to provide the application and information required under paragraph (2)(A), the reference product sponsor . . . may bring an action . . . for a declaration of infringement, validity, or enforceability of any patent that claims the biologic product or a use of the biological product."  42 U.S.C. § 262(l)(9)(C).  In essence, the statute expressly provides the remedy to address the precise "non-disclosure" path that Sandoz chose.  As such, failure to disclose was found to not be a violation of the BPCIA.

Amgen has asserted that such a conclusion is contrary to the purpose of the BPCIA.  In other words, without the knowledge of the nature of the biosimilar drug product and the methods of manufacturing it, the RPS must essentially guess which patents it should assert.  This uncertainty may ultimately prevent a reference product sponsor from being able to assert any of its patents in federal court prior to the launch of the biosimilar drug.  Nevertheless, Sandoz has pointed out that Congress did not include a provision linking the FDA approval process to the patent resolution procedures.  Thus, there is nothing in the statute that would appear to prevent the FDA from approving an aBLA even if the applicant did not participate in the patent dance.

BIO's Amicus Brief

The Federal Circuit focused on the text of the statute, specifically the inclusion of the remedy should the aBLA applicant fail to disclose its application.  For the Supreme Court to reverse on this issue, they will likely need to be convinced that such an interpretation of "shall" is contrary to the legislative history of the BPCIA.  BIO submitted a brief in support of Amgen that highlighted the background and history of the statute, recounting the efforts of the various interested parties to arrive at a compromise solution.  As BIO put it, the Federal Circuit's "construction was contrary to the plain meaning of the text, the purpose of the legislation, and the intent of Congress."

With regard to the text, BIO stressed that "shall" means "shall" -- in other words, the "shall" connotes a requirement (citing the Supreme Court's recent case of Kingomware Techs Inc. v. United States case from 2016).  In fact, the very next section of the statute, § 262(l)(2)(B) demonstrates that Congress understood the difference between "shall" and the word "may" (which implies discretion):  "[The aBLA application] may provide to the reference product sponsor additional information requested by or on behalf of the reference product sponsor."  Moreover, BIO pointed out that the BPCIA was fashioned after the Hatch-Waxman act for dealing with small molecule generics.  Without the disclosure obligation, though, the patent-dispute-resolution scheme of the BPCIA scheme falls apart.  "Not only is the information disclosure requirement critical to the identification of relevant patents, it is also vital to the sponsor's ability to assert them."

The BIO brief is probably at its most effective, however, when it explains why the history of the legislation "bolsters" this conclusion.  For example, the brief explained that the Senate "HELP" committee, consisting of Sens. Hatch, Enzi, Kennedy, and Clinton, worked for approximately three years to devise a bill that ultimately became the BPCIA.  This committee "concluded that a mandatory patent-dispute-resolution procedure would best effectuate the goals of the legislation while balancing competing interests of stakeholders."  This was because biosimilar manufacturers were always able to (and are still able to) file a full BLA to get a biological generic on the market.  But by taking advantage of the abbreviated FDA approval pathway of the BPCIA, it must "accept both the benefits and the burdens."  The Federal Circuit's decision, therefore, upset this balance, allowing an aBLA applicant to get all of the benefits and none of the burdens.

The Amicus Brief of the Eleven Professors

The eleven professors, for their part, focused on the real-world implications of the Federal Circuit's construction of the BPCIA.  Beginning with an explanation of the innovations brought about by the biopharmaceutical industry, the brief highlighted the advances that have come about thanks to the biotechnology revolution.  The United States has been at the forefront of those advances, for example, the U.S. was responsible for "originating more than half of all worldwide biopharmaceutical introductions from 1982 to 2003" (citing Henry Grabowski, Follow-on Biologics: Data Exclusivity and the Balance Between Innovation and Competition, 7 Nature Rev. Drug Discovery 479, 483 (2008)).  Nevertheless, obtaining such drugs can take around ten to twelve years at a cost more than $2.5 billion.  Expenses related to the manufacturing process range from building the required complex facilities to the actual development and validation of the process.  Moreover, biologic drugs are risky because they, unlike small molecules, present a risk of immunogenicity that can render the medicine ineffective or cause the treatment to become life-threatening.  It is because of this, according to the brief, that patent protection is essential.  And the Federal Circuit's decision disrupts the balance established by the BPCIA, thereby eroding the reference product sponsors' patent protection.

The eleven professors also countered the arguments posited by Sandoz by casting the Sandoz actions as an end-around the compromise reached by Congress.  In other words, they were attempting to obtain an outcome through the courts that they otherwise were not able to obtain from Congress.  For example, the parent company of Sandoz, Novartis, repeatedly opposed any version of the statute that combined the biosimilar regulatory pathway with the patent resolution process.  This went against other representatives of the generics industry who generally agreed that resolution of the patent issues prior to biosimilar approval was desirable.  Congress nevertheless rejected the Novartis approach.  The eleven professors concluded by arguing that "Novartis/Sandoz should take its case back to Congress rather than asking this Court for relief that the company failed to secure from the legislature."